Ayla, LLC v. Alya Skin Pty. Ltd.

Background

Ayla, LLC brought trademark-infringement claims against Alya Skin Pty. Ltd. based on Alya Skin’s use of the ALYA and ALYA SKIN marks in connection with beauty products and retail store services. Alya alleged that Alya Skin sold and shipped products to California, advertised online and through social media accessible in California, worked with social-media influencers in California and elsewhere, and had an arrangement with a United States retailer.

Alya also argued that Alya Skin had substantial contacts with the United States as a whole. It pointed to the use of United States dollars on Alya Skin’s website, marketing that referred to United States approvals or certifications, an application for a federal trademark registration, United States-based influencers, United States publications, Black Friday promotions, and a United States shipping facility.

Alya Skin submitted evidence that it had no United States offices or branches, retail stores, employees, or directors in the United States, and did not target California advertising. Its evidence stated that less than 10% of its sales were to the United States and less than 2% were to California. Alya Skin also denied having a contract with Urban Outfitters and stated that most sales occurred in Australia, New Zealand, China, and Canada.

Legal standard

A motion to dismiss for lack of personal jurisdiction challenges whether the court has power over the defendant. The plaintiff bears the burden of showing that jurisdiction exists. When the court does not hold an evidentiary hearing, the plaintiff must make a preliminary showing of facts supporting jurisdiction, and conflicts in the parties’ evidence generally are resolved in the plaintiff’s favor.

The court considered both California jurisdiction and nationwide jurisdiction under Federal Rule of Civil Procedure 4(k)(2). General jurisdiction requires affiliations so continuous and systematic that the defendant is essentially at home in the forum. Specific jurisdiction requires, among other things, conduct purposefully directed toward the forum and claims arising from that conduct. Rule 4(k)(2) permits a federal court to consider a defendant’s contacts with the United States as a whole when the claim arises under federal law and the defendant is not subject to general jurisdiction in any state.

California jurisdiction

The court agreed that Alya Skin’s principal place of business was in Victoria, Australia and that California did not have general jurisdiction over it.

The court also found no specific jurisdiction. Alya did not show that Alya Skin expressly aimed its conduct at California. The court held that Alya Skin’s interactive website, including its ability to sell and ship products to California, did not provide the additional conduct needed to show California targeting. The website’s messaging, marketing-signup, product-launch, and beauty-tip features were standard features of a modern website rather than evidence of targeting California consumers.

The court further relied on the fact that less than 2% of Alya Skin’s sales were to California, while most sales occurred in other countries. It also found that the social-media influencers identified by Alya had worldwide followers and did not establish California-focused conduct. Alya’s investigators’ purchases in California did not change the result.

Nationwide jurisdiction

The court found that Alya satisfied the first two requirements of Rule 4(k)(2): the trademark claim arose under federal law, and Alya Skin was not subject to general jurisdiction in another state. But the court concluded that Alya did not make the required preliminary showing that Alya Skin purposefully directed meaningful conduct toward the United States.

The court found that the United States-based influencers did not establish meaningful United States contacts because there was no evidence that their followers were located in the United States. Alya also offered no evidence that the alleged Urban Outfitters contract actually existed or that it resulted in sales. Alya Skin’s trademark application did not establish minimum contacts, and the court noted that Alya Skin had abandoned that application.

The court also found that PETA’s global status, the United States shipping facility, the website’s default currency, international publications, and Black Friday promotions did not show substantial United States contacts because those activities were global or depended on the website visitor’s location. The court added that exercising jurisdiction would not be reasonable even if purposeful availment had been shown, citing Alya Skin’s limited United States contacts, the burden of litigating in California when relevant individuals were in Australia, and the apparent availability of trademark protection in Australia.

Disposition

The court granted Alya Skin’s motion to dismiss for lack of personal jurisdiction and directed the clerk to terminate the case. The order did not decide whether Alya Skin infringed Ayla’s trademarks.